Bank of England's Bailey: Crypto Won't Get a 'Free Pass' on Innovation -- Financial News
15 Junho 2021 - 11:30AM
Dow Jones News
By Justin Cash
Of Financial News
Bank of England governor Andrew Bailey has warned that
cryptoasset firms won't get a "free pass" to innovate from
regulators.
While Mr. Bailey dismissed criticism that the central bank isn't
open to innovation when it comes to digital currencies, he said
there will be "elements of tough love" in how the sector is
supervised going forward.
"I believe that as public policymakers we have to be clear on
the rules of the road that innovation needs to follow to serve the
public interest," Mr. Bailey told lobby group TheCityUK's annual
conference on Tuesday. "What we can't have is a world where
innovation gets a free pass to a non-public interest. The odds of
that ending not well are too high."
"This requires early engagement, something we are very keen to
do on digital currency," Mr. Bailey added. "Playing catch up isn't
a recipe for success."
The comments come on the back of a consultation launched by the
Basel Committee on Banking Supervision last week seeking to impose
tighter capital rules on cryptoasset holders, amid fears that the
expansion of digital currencies could have an impact on financial
stability.
The Bank of England has been exploring the introduction of a
central bank digital currency but has expressed its own concerns
over issues with cryptocurrency use, ranging from banking sector
liquidity resilience and credit conditions to the Bank's ability to
implement monetary policy.
"We aren't anti innovation or anti competition, but we are
trying to manage our sphere of influence to serve our public policy
objectives," Mr. Bailey told the conference. "New forms of digital
money represent an important source of innovation, so we must
evaluate how they meet our public interest objectives."
Digital currencies "have the potential to be systemic in terms
of their importance to the financial system," he said, depending on
how they scale up from current levels.
"We don't know much about the likely demand for digital money
yet or how it will be remunerated," Mr. Bailey added, but hinted
that the Bank would be prepared to "limit the speed of transition
towards digital money" if required.
A precise regulatory model for the crypto sector could vary
considerably based on how the digital money space evolves from
here, Mr. Bailey said, "as long as it offers equivalent protections
to commercial money."
The governor also reiterated the Bank's position that
cryptocurrencies have no intrinsic value as opposed to stablecoins,
which are forms of digital currencies linked to underlying assets
like fiat currencies. He also noted that cryptocurrencies'
extrinsic worth can be "highly unstable and could be nothing."
Website: www.fnlondon.com
(END) Dow Jones Newswires
June 15, 2021 10:24 ET (14:24 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.